It was one of the most oft-repeated promises of Obamacare: It will cover people, regardless of pre-existing conditions.
But when it came time to make good on that promise, Congress came up short. Yes, in 2014, the new law prohibits insurers from discriminating against pre-existing conditions—starting in 2014. But what about the next four years?
Lawmakers thought they’d patched that coverage gap by requiring the federal government to create high-risk pools to insure citizens with pre-existing conditions. However, as the AP reports, “some vulnerable patients are probably going to feel a little cheated.” In other words, they didn’t quite get that bit right.
The new pools will operate parallel to existing state high-risk pools. And, since they will be federally subsidized, the new pools will offer lower premiums. Richard Popper, the director of Maryland’s high-risk pool, claims that “premiums in the new federal pool are expected to be 10 percent to 50 percent lower than current state rates”.
Many of those in state high-risk pools struggle to pay the costly premiums, so these people can just switch over to the new, less expensive federal pools, right? Nope.
To keep the Obamacare cost estimate down (with this crowd, the driver was always a favorable CBO score, not intelligent policy), lawmakers included a requirement that people entering the new federal pools must have been uninsured for at least six months prior to enrolling. So if you’re currently in a state high-risk pool, the only way to switch is to jump ship and go uninsured for six months. Not a very appealing option for the very sick.
This policy conspicuously punishes those who have tried to do the right thing by restricting their access to more affordable options than the current state high-risk pools. But it may not be so for long.
Congress allotted only $5 billion to run the federal high-risk pools. According to the AP, Medicare economists predict that the program could spend $4 billion in its first year alone, running out of cash well before 2014.
What then? Well, it could mean that states will have to pick up the costs for the remaining years of the program. Or it could mean patients using the pools will simply see their premiums skyrocket. In other words, Obamacare could need a bailout before it even begins.
There are much more effective ways to provide coverage for Americans with chronic conditions, as Heritage’s Ed Haislmaier outlines here.